November 2, 2017
There was a time when efficiency was enough. When the role of the CEO was to optimize business as if it were a machine—making sure the supply chains and manufacturing systems and marketing channels were produced maximal output at minimal cost. Those days are over. And though I don’t suffer any romantic notions about the “good old days” of quality management and core competencies, being a CEO was certainly a more predictable job back in the 20th century.
Efficiency and delivering solid returns still matter, of course, but the old methods of getting there are threatened. Actually, I’ll go even farther: The old methods are incapable of preparing you for what we are seeing today—the most volatile and disruptive business climate the world has ever known.
In order to compete today, CEOs need evolutionary skills that will ensure their survival in a fast-changing climate. Business fitness now means learning how to be agile, resilient, and creative. It means adapting to the marketplace in quick generational cycles. That requires a brave new brand of leadership, and from our vantage point, as we work alongside companies young and old from around the globe, it requires being able to think like a designer.
The old methods are incapable of preparing you for what we are seeing today—the most volatile and disruptive business climate the world has ever known.
Why? Because if the core competencies of old were Gary Hamel’s “maintain world manufacturing dominance in core products,” the core competencies of today (customer obsession, agility, resilience) are intrinsic to the designer’s craft. Think about it: As the designer of a new service, product, or experience, your purpose is to identify the needs and desires of the customer, prototype solutions, and create something flexible enough to pivot quickly as those needs change, ensuring your continued relevance.
So, it’s clear that a design mindset is important, but does it ladder up to the CEO level? It does. And that’s because the organization itself is a design project. CEOs are charged with setting up a design-friendly culture in which the very metabolism of the organization runs faster. That means giving all levels of the company, from interns to managers to VPs, empowerment and autonomy—the permission to shift when they can see farther than you can. It means creating a safe environment in which they can fail without fear. It means telling them a compelling story about the purpose of your company and getting them invested in that story. You are working together to create something magnificent, and will walk into an unknown future side by side, together.
Knowing that those are the kinds of businesses that will thrive in this environment, a growing number of organizations are building design into their core competency. Ford is doing so today, and we’re proud to be their partners in that. Legacy technology companies like IBM have been investing heavily in design, too.
You are working together to create something magnificent, and will walk into an unknown future side by side, together.
Being capable of real change, of designing a future-proof, evolutionary organism, is no small feat. Take automobile companies: The model was once to sell cars that people wanted to drive. But today, mobility is a much more fluid concept. Now, car companies are designing for driverless cars and deliveries, for ridesharing, for multi-modal commutes, and for high-efficiency electric vehicles. That, in turn, means thinking about the urban infrastructure and how it will adapt to such changes—what happens to gas stations and parking lots? It means thinking through how driverless delivery ripples out to retail. The organization that is designed to sell a hunk of metal that takes a person from point A to point B is past its due date.
But it’s not just the auto industry—almost every business we know is facing this challenge. Shifting the purpose of an organization made for today to an organization fit for tomorrow is the job of the CEO. And, at its core, it’s a problem that requires design thinking.